Advice needed: potential breach of outsideIR35 contract terms by consultancy firm

[Cantona102938]

I was wondering if I could seek some advice.

I am a contractor, outside IR35, based in the UK. I contract via a consulting company whose end client is a financial services firm. On Friday, I was told by the consulting company, via a WhatsApp call, that the end client is ending the contract and that this coming tomorrow would be my last day (the engagement finishing that day). This applies to 4 of us all outside IR35.

In the terms of the contract, both myself and the consulting company need to give 4 weeks written notice if any early end to the contract occurs. They have not done this and it appears to be a breach of the contractual terms.

Do I have these contractual rights outsideIR35? Has this happened to anybody else in England?

Can somebody recommend the best way to seek legal advice on this? I understand that I do not have employment rights.

Many thanks!

[NotAllThere]

Your contract with the consulting company does not guarantee work. Therefore, they can technically give you four weeks notice starting last Friday, and then not give you any work to do that you can bill for.

You could try to get money out of them, some people have, apparently, been successful. The consultancy may not realise that they don't have to pay you. But the chances are not high.

[ladymuck]

Check other clauses in your contract about the conditions you need to meet in order to get paid. It's quite common for there to be a time sheet requirement, for example.

It's quite common, as NAT says, that a contract ends 'because there is no work' and therefore there is nothing you can bill for. So the consultancy can serve you 4 weeks notice but say there is nothing to do.

If you were expecting to be paid for doing no work then one could argue you're an employee However, rephrased as an exit fee for early termination, you may be able to negotiate some form of compensation but you may not get the full 4 weeks you're hoping for.

[b0redom]

Submit an invoice, but don't hold your breath.

If it's outside IR35, there's no mutuality of obligation, so there's no requirement for them to offer you work. They can invoke the notice period and provide you with no work during it. No work = no pay even though you're still technically under contract.

[SussexSeagull]

Depends on the contract but it is anything new IR35 friendly they are under no obligation to offer work and as others have said there might very well be a signed timesheet clause.

Put in an invoice but don't expect it to be paid.

[northernladuk]

Welcome to contracting. This is exactly why we are (were) able to have outside contracts. You can't have your cake and eat it. It's either outside with risks, or it's nice and safe inside. This mutality of obligation (or lack thereof if you want to be pendantic) is one of the main pillars of an outside IR35. One bit of good news here is you and the client have some rock solid outside IR35 evidence

The basic fact you are missing is that you are essentially on a Time and Materials basis. You do some work, you get paid for it. That's all there is to it and should answer your question. Understanding what you are properly will mean you don't need to ask these types of questions.

A second fact that goes on to explain the first is that you are a 'contract'or so you need to fully read and understand your contract. You've jumped on the 4 week notice bit but you've missed a fundamental clause in all IR35 contracts. Somewhere in your Payment Terms it will state 'payment will be made upon receipt of a signed timesheet' or something pretty close to that. The timesheet proves you did work so you get paid for it as per the contract. If you do not have any work to do then you cannot get a signed timesheet hence you get no pay. This helps you understand the first basic fact.

A third fact is the client is not obliged to give you work. If you have no work to do then you can refer back to point 2. Believe it or not you already do this but you don't realise it. Being asked not to work bank holidays and xmas is EXACTLY the same as this. You are available to work but the client doesn't want to give you any so you have the day off, can't get a signed timesheet and therefor not get paid. You taking holiday is the same, client offers you work which you are not obliged to do there and then so you say no and have a week off. It's the same thing as where you are now, just a different mindset.

Putting all these facts together you have a contract with a notice period but only get paid for the work you do. The client can invoke the notice period for the contract to end, but doesn't need to offer you work in the meantime. You are still in contract but do no work and get no pay. Effectively instant dismissal... but if that's how you see it you are thinking about it all wrong.

If you think you deserve to be paid notice for doing no work, happy to have xmas/bank holidays off when told to and you call the time off you have 'holidays' then you've got a disguised permie mindset, not an outside contractor. Yes I'm being pedantic, they work out the same but for very different reasons and important to understand these reasons if you've a hope of not blowing your own outside determination.

[northernladuk]

Just because I'm rambling let me cover your next question which is probably something along the lines 'Well if I want to leave can't I just give a months notice on Friday and not turn up again on Monday. The answer is probably no. The client in your case is not giving you work because the piece of work they wanted has ended for one reason or another. It could be they've delivered early, could be a cancellation of the project or it could even be performance related but the work you were doing has come to an end. They are not obliged to offer you anymore. You quitting on the Monday is likely to be in the middle of a piece of work. If the client offers it, you are obliged to do it. There is no natural end to the piece of work so there is a chance you'll get trouble for breach of contract or just not get paid your last months/weeks invoice.

It's not quite as black and white as that and I am sure someone will argue you can do it but it's complex to understand and also tends to be situation specific. It can often be seen as not 'fair' as client/supplier relationships are often lopsided. Can be interesting stuff if you want to dig in to it to try understand it all but it can be complex.

You've been very unlucky to run in to this situation which needs a good understanding of everything mention above but from chatting to contractors over the years it does happen more than you realise. A real pisser for sure but it's part and parcel of doing what we do for the megabucks we get for it.

[Cantona102938]

From one northern lad to another, thank you for your comments.

It appears the 4 weeks notice period will be a difficult battle.

I worked the first five days of July, with some days on client site and responding to end client requests (a bank). I submitted my timesheet to the consulting firm this morning, via an external portal, for these first 5 days of July. It appears they have now revoked my access to the portal, likely as a means to block any sign-off of the subsequent payment of the work delivered.

In short, it appears they do not want to pay me for the work I have delivered over the first week of July. Could you suggest any follow-up to this? A claim via the UK small claims court?

Many thanks!

[WTFH]

From one northern lad to another, thank you for your comments.

It appears the 4 weeks notice period will be a difficult battle.

I worked the first five days of July, with some days on client site and responding to end client requests (a bank). I submitted my timesheet to the consulting firm this morning, via an external portal, for these first 5 days of July. It appears they have now revoked my access to the portal, likely as a means to block any sign-off of the subsequent payment of the work delivered.

In short, it appears they do not want to pay me for the work I have delivered over the first week of July. Could you suggest any follow-up to this? A claim via the UK small claims court?

Many thanks!

What are your payment terms?
You were told that it was finishing last week, you've submitted your time sheet for last week.

Your current "follow up" is to wait until you are due to be paid. If you do not get paid in the normal manner, then you look at the next steps. You don't take a business to court for something that you have decided might happen in the future.

[avonleigh]

You have no rights as a contractor. I have been terminated a few times. Sometimes they have paid notice period, sometimes not. Depends on how nice the client is. I even handied in notice once as didn't like the company and was terminated on the spot because of it.